B
Bebee72
New Member
Hi, I am a first time buy-to-let investor on an Assured Shortholad Tenancy (AST) residential project with fixed 2 years 7% net guarantee rental of the purchase price upon completion. The project, originally to plan to complete in June 2019,has to be extended to Feb-2021. Recently, the developer's solicitor emailed me and telling me that they have to switch the AST Agreement to Common Law Tenancy agreement with me, reason being the developer is now concerned that rental guarantees being provided by them in this fashion may mean that they need to be authorised by the Financial Services Authority which they are not.
They also pointed out the followings:
The tenancy cannot be an Assured Shorthold Tenancy as the tenant is a company. The agreement with the seller confirms that you will receive a set rent regardless of the actual rent received by the Seller on any sub-tenancy.
" Please note that all rent guarantees not cast iron guarantees as the "rental guarantee" is only as good as the person who gives it."
In this regard, does it mean under the Common Law Tenancy agreement, we will have the possibility of not receiving the 7% net guarantee rental? Is the Common Law Tenancy agreement, as compared to AST, on a large extent, not favourable to us investors? If this is the case, do you think I could cancel the contract without any liability? I am a novice on the property market and hope I could get some useful advises from you all. Many thanks.
They also pointed out the followings:
The tenancy cannot be an Assured Shorthold Tenancy as the tenant is a company. The agreement with the seller confirms that you will receive a set rent regardless of the actual rent received by the Seller on any sub-tenancy.
" Please note that all rent guarantees not cast iron guarantees as the "rental guarantee" is only as good as the person who gives it."
In this regard, does it mean under the Common Law Tenancy agreement, we will have the possibility of not receiving the 7% net guarantee rental? Is the Common Law Tenancy agreement, as compared to AST, on a large extent, not favourable to us investors? If this is the case, do you think I could cancel the contract without any liability? I am a novice on the property market and hope I could get some useful advises from you all. Many thanks.